LIC shares rise 2% after Q2 earnings; here’s why JM Financial sees 21% upside potential
The uptick came after the state-run insurer reported its September-quarter (Q2) results. Brokerage JM Financial reiterated its ‘Buy’ call on LIC, citing strong first-half margins and expectations of a robust second half.
- Nov 7, 2025,
- Updated Nov 7, 2025 10:08 AM IST
Shares of Life Insurance Corporation of India (LIC) gained as much as 2.3 per cent in Friday’s trade to hit a day’s high of Rs 916.40 on the BSE, compared with the previous close of Rs 895.45.
The uptick came after the state-run insurer reported its September-quarter (Q2) results. Brokerage JM Financial reiterated its ‘Buy’ call on LIC, citing strong first-half margins and expectations of a robust second half. The brokerage maintained its target price at Rs 1,111, implying a 21 per cent upside from today’s high.
LIC’s Value of New Business (VNB) margin stood at 19.3 per cent in Q2, up 150 basis points year-on-year (YoY), despite absorbing the full impact of the loss of Input Tax Credit (ITC). VNB for the quarter rose 8 per cent YoY to Rs 3,200 crore, taking first-half (H1) growth to 12 per cent.
The insurer’s profit after tax (PAT) surged 32 per cent YoY to over Rs 10,000 crore during the quarter. However, the overall Annualised Premium Equivalent (APE) was broadly flat, as 24 per cent growth in group APE was offset by an 11 per cent decline in individual APE.
JM Financial noted that the contraction in the individual segment was a strategic shift following new surrender norms introduced in October 2024. LIC has since stopped selling policies with a sum assured below Rs 2 lakh, leading to a 21 per cent drop in policy count during H1 but improving the average ticket size.
The brokerage said the margin expansion was driven by a higher share of large-ticket retail policies and an improving mix of non-participating (non-par) savings products. LIC’s management plans to continue focusing on the non-par savings and annuity segments, which could further strengthen margins.
Looking ahead, JM Financial expects LIC to benefit from the GST 2.0 tailwinds and projects over 15 per cent growth in the second half (2H). The brokerage said LIC remains undervalued at current levels and is likely to re-rate as growth momentum accelerates.
Shares of Life Insurance Corporation of India (LIC) gained as much as 2.3 per cent in Friday’s trade to hit a day’s high of Rs 916.40 on the BSE, compared with the previous close of Rs 895.45.
The uptick came after the state-run insurer reported its September-quarter (Q2) results. Brokerage JM Financial reiterated its ‘Buy’ call on LIC, citing strong first-half margins and expectations of a robust second half. The brokerage maintained its target price at Rs 1,111, implying a 21 per cent upside from today’s high.
LIC’s Value of New Business (VNB) margin stood at 19.3 per cent in Q2, up 150 basis points year-on-year (YoY), despite absorbing the full impact of the loss of Input Tax Credit (ITC). VNB for the quarter rose 8 per cent YoY to Rs 3,200 crore, taking first-half (H1) growth to 12 per cent.
The insurer’s profit after tax (PAT) surged 32 per cent YoY to over Rs 10,000 crore during the quarter. However, the overall Annualised Premium Equivalent (APE) was broadly flat, as 24 per cent growth in group APE was offset by an 11 per cent decline in individual APE.
JM Financial noted that the contraction in the individual segment was a strategic shift following new surrender norms introduced in October 2024. LIC has since stopped selling policies with a sum assured below Rs 2 lakh, leading to a 21 per cent drop in policy count during H1 but improving the average ticket size.
The brokerage said the margin expansion was driven by a higher share of large-ticket retail policies and an improving mix of non-participating (non-par) savings products. LIC’s management plans to continue focusing on the non-par savings and annuity segments, which could further strengthen margins.
Looking ahead, JM Financial expects LIC to benefit from the GST 2.0 tailwinds and projects over 15 per cent growth in the second half (2H). The brokerage said LIC remains undervalued at current levels and is likely to re-rate as growth momentum accelerates.